New Delhi, Aug 13 : The Prime Minister's Economic Advisory Council has lowered the GDP growth projection to 7.7 percent during 2008-09 as against 9 percent in last fiscal.

EAC chairman C Rangarajan said that inflation could shoot up to beyond 13 percent. Agricultural and industrial growth rate projection has also been brought down.

"For some more time inflation can increase. It could touch 13 percent...but by December it will start declining and is likely to moderate to 8-9 percent by March 2009," said C Rangarajan, outgoing chairman of the PMEAC.

Taking cues from lower IIP figures, economists had projected economic growth to moderate to below eight per cent this fiscal from 9.1 percent last year.

Justifying the 7.7 percent economic growth projection for 2008-09, Rangarajan said, "There is a slowdown in agriculture, industry and services and the global environment is not very conducive to growth. This will affect Indian economy as well."

A host of measures, including the monetary steps by RBI, to contain inflation may have taken a toll on economic expansion.

In a statement, the EAC said that inflation can be brought down to 8-9 percent by March 2009 through co-ordinated policy action and tight monetary stance.

The EAC has lowered agriculture growth projection to 2 percent in 2008-09 as against 4.5 percent in 2007-08.

Industrial growth projection has been lowered to 7.5 percent this fiscal as against 8.5 percent in the previous year, says PM's EAC.

Stating that the surge in inflation was mostly on account of surging global commodity prices, the EAC said there were serious fiscal risks arising from growing off-budget liabilities, which had been estimated at 5 percent of GDP.

The PM's economic think tank also projected the fiscal deficit target to overreach while stating revenue deficit would persist.